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I enjoyed reading the article about PayPal's commerce plans. Mr. Schulman has identified a big prize, commerce. One day PayPal could make more from their commerce initiatives than their current payments business. PayPal is fortunate to have such a visionary. Now, the tough part begins, execution of the strategy! A big part of the success difference is choosing partners that bring the right set of skills and technical capabilities that enable commerce. A lot is at stake, especially when Alipay enters the market globally. Alipay currently has over 300 million customers.

The most important thing for any currency is "trust". We all saw what happened to Bitcoin. Someone stole some coins from the fancy cookie jar! Unregulated currencies to be really successful must be stable and have a critical mass appeal. Bitcoin behaved more like a security than a currency during its short tenure.

Time and time again we have seen unregulated markets go into chaos. Even the former Chairman of the Federal Reserve admitted that he was wrong when he believed that markets are naturally self-adjusting. The world found out differently when the global economy nearly collapsed as a result of lax oversight on the mortgage business. The world still has not fully recovered from that mess.

As a consumer why would I want to use an unregulated currency since most of the current ones work fine and cost nothing or very little.  I know I have certain protections if something goes wrong in a regulated world. Unregulated currencies are "cool", but when it comes to my money I just do not trust them since I've seen the "Good , the Bad and the Ugly" in my 40 years in this business.

If digital currencies want to really go main stream, I strongely suggest that they grow up and get the "Good Housekeeping Seal of Approval"  via an international regulatory body. This is my challenge to the proponents of such currencies to enable them to realize market success -- improve the value proposition by adding the "trust" factor.

Let's pause and ask what needs to be modernized. The payments business is a $1 trillion plus a year business from a revenue perspective. The cards piece of it is at least $500 billion. I do not see $500 billion being disintermediated to disrupters. But, the card business can become more efficient with new Big Data, Analytics, Social, Cloud, Security and Mobile capabilities to enable a more digitally connected world of commerce. There is a lot room for all the players. But, at the end the day remember that the banks will still hold the keys to the empire since they own the loans and deposits.

The cost of payments modernization is a lot less than the recent fines that some banks have incurred recently. I have experienced many large transformations in the past 5 years. Most of the banks justified their transformation projects on the ability to comply with new regulations; hence,  banks developed solutions that satisfied regulators, bank line of business and technical leaders, and shareholders.

Before a bank can innovate it needs to modernize 30 years of old legacy fixes and patches using new architectural approaches. This is heavy lifting and requires a well thought out plan; otherewise, failue is almost guaranteed. Any payments transformation plan also requires the addition of new capabilities such Big Data, analytics, cloud, social, security and mobile.

Wow. This is a big WIN for Swift, especially for retail payments.

Wow. This is a big deal. Both Visa and MasterCard will invest heavily to get access to this market. Expect all types of incentives to both the banks and merchant!

Makes a lot of sense to me. I hope all POS terminal manufactures are doing the same thing. Consumers will benefit if everyone starts rebuilding our infrastructure. The fun part is creating a commerce hub where issuers, acquirers and retailers can innovate with value propositions that benefit everyone. Think Big Data and Analytics.

I believe the cost of transaction acceptance is one of the most important issues that mature retailers deal with. Carholder rebates, now up to 1.5%, are reflected in merchant discounts. For gas purhases some issuers are paying rebates of 5%. The industry needs to RETHINK its current the stream of costs that contribute to today's current merchant discount rates. Interchange rates in the U.S. have almost doubled in the past 30 years in order to fund reward programs. At the end of the day I am sure consumers would prefer lower prices than a bunch of reward points. I respect the banks' need to hang onto the $50+ billion in hidden interchange fees. Maybe a payments disrupter will enter fray and create some chaos. It should be fun to see how this all falls out.

It is a great opportunity to transform the business to yield benefits for clients, the business and the regulators. An integrated payments hub can be used as an accelerator to provide value in the following areas:

1.) intraday liquidity mgt

2.) advanced customer and market insight 

3.) risk management and compliance

4.) client service and sales efficiency